Vendors are not updating their partner programmes quickly enough to keep up with the speed of cloud's impact on technology, according to consultancy Accenture.
Many technology vendors are struggling to update their channel rewards and incentives in line with the take-up of cloud and the as-a-service consumption model, according to consultancy Accenture.
Legacy programmes and partner reward plans mean that channel companies are not incentivised to sell on the new models, according to Jason Angelos, managing director of sales strategy and transformation at Accenture Strategy.
"A barrier for a lot of sales and commercial leaders is around the platform, the data and legacy operating model, what's behind the scenes," Angelos said. "There are new commercial offers in place, but it's still the old plumbing, the old processes, the old partner programmes," he noted.
Angelos was discussing changing channel sales models at this month's Zyme channel data management (CDM) summit. The event focused on the problems caused by a lack of accurate sales data in the channel, and how vendors are overspending on partner incentives as a result.
Indepent research commissioned by CDM software vendor Zyme reports that 49 per cent of vendors say that long incentive payment cycles are impacting their relationships with channel partners. Less than half (43 per cent) ask for partner input during the design of an incentive programme.
In addition, 61 per cent of the companies questioned said they have had to cap financial rewards because of previous mistakes with over-payments.
Zyme CEO Chandran Sankaran described the overspend on partner rewards as "the big, leaky backend incentive spend in the channel, with no sense of accountability. It exists as an enitlement - it's not even low-hanging fruit, it's sitting on the ground, waiting to be picked".
Commenting on the need for accurate channel sales data, Angelos said: "If you have $20m in incentive funds and you can isolate $8m that's underperforming, you can reinvest that in smarter or more tailored programs or getting the fundamental channel data in place or next level analytics partner support."
Angelos said the biggest challenge for channel partners transitioning to a services-led approach is trying to manage two business models at once.
"[Cloud] is massive; it's a headline and it is not a hundred per cent of the business," he said. "There are two motions running parallel. It's like changing the engines while the plane is flying."
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